Changi Airport Group defends GetIt by Changi Recommends amid brand and retailer concerns over pricing and sourcing

SINGAPORE. Changi Airport Group has issued a strong defence in the face of rising concern among travel retailers and brands about the pricing and procurement policies of GetIt by Changi Recommends (Getit.ChangiRecommends.com), a Changi Airport Group-controlled website targeted at the local Singapore market.

The site is a separate entity from fellow Changi Airport Group website iShopChangi.com (see panel below).

“Airports and brand owners recognise the urgent need to actively explore new revenue sources and to pivot from traditional markets to serve new customers, including domestic non-travellers” – Changi Airport Group

GetIt by Changi Recommends offers a wide range of merchandise at ultra-competitive prices, buoyed by constant special promotions such as the one below on 26 October

Several liquor and beauty brands have expressed their fears about GetIt by ChangiRecommends bypassing official distribution channels [which it can legally -Ed] and often sourcing product – sometimes decoded – from the parallel or grey market. Many of the products offered are heavily discounted at prices well below those of Changi Airport and its official ecommerce platform iShopChangi.

Job losses in black & white and blurring lines in grey

We should stop talking about when travel retail as an industry or sector will recover but break it out country by country, or more accurately country to country.

Click to read more from The Moodie Blog

“This is playing havoc with the duty free ecosystem as well as the local market,” one supplier told The Moodie Davitt Report [the multiple sources quoted in this story all requested anonymity).

“Why would you run a parallel site undercutting everyone?” asked another. “It doesn’t make any sense. What you’ll end up doing is completely killing travel retail. The domestic retailers will then respond, and prices will drop. Why would you bother buying anything duty free at the airport [on arrival] if you now don’t have to carry it and you can just get it delivered at home?”

But a Changi Airport Group (CAG) spokesperson said that GetIt by ChangiRecommends was a legitimate “pivot” during the COVID-19 crisis and denied that the platform was either a conduit to goods of doubtful provenance or an example of price dumping (see full CAG statement in panel below).

A CAG spokesperson told The Moodie Davitt Report: “COVID-19 has decimated aviation and travel retail. Airports and brand owners recognise the urgent need to actively explore new revenue sources and to pivot from traditional markets to serve new customers, including domestic non-travellers. This is why, where possible, Changi Airport Group (CAG) has been actively working with travel retail brands to bring them onboard our iShopChangi platform.

“CAG has always viewed locals in Singapore as our closest customers. And we are keen to serve them through our e-commerce channels even when they are not travelling. We are however mindful that we are but one of many players in the domestic e-commerce space.

This price comparison chart underlines the value being delivered on GetIt by Changi Recommends but also highlights the conundrum for the duty free ecosytem

“Underlying our e-commerce strategy are two key objectives – to work with our travel retail partners so that we grow our businesses on a sustainable basis, and to offer our customers a wide range of products from reliable sources at competitive prices.

(Above and below) Some examples of the extreme price competitiveness of GetIt by Changi Recommends

“iShopChangi and GetIt by Changi Recommends are two distinct platforms to meet the needs of different customer segments. The brands that we have talked to agree that the e-commerce market is increasingly dynamic and they themselves are rethinking the traditional differentiation between travel and non-travel retail.”


iShopChangi.com has successfully pivoted to also selling to non-travellers (with brand support) since April

Provenance concerns

The lack of clarity over GetIt by ChangiRecommends’ sourcing also poses safety and provenance issues, suppliers say. A leading liquor company executive said that if decoded product bought on the open market is sold, there are even risks of it being fake. And if a product had to be recalled for any reason – such as, say, splinters of glass in the liquid – that is impossible with coding removed.

Getit by Changi Recommends features many of the world’s most famous brands at highly attractive prices

A prominent beauty house representative added: “There is a problem of safety because the product can be old or badly stored. The second one is the environment – the image – it’s clearly a parallel site that has no right to proceed like this with my brand or any other, I guess.”

Parallel yes, fake no, says CAG

However, the CAG spokesperson rejected any allegations of dubious provence, commenting, “CAG and its subsidiaries do not deal in fake goods. We take the greatest care in how we source for our products and will deal only with legitimate distributors, whether through their travel retail or domestic arms.

“For those unable to supply us with products that our customers want, we will speak to reputable and established parallel importers. Sourcing from these suppliers is common and legal in Singapore. For some high-demand product categories, they offer highly competitive prices benchmarked against other e-commerce platforms as a way to also adapt to the new business environment and customer needs.”

Pricing disruption

But pricing rather than provenance is the key concern for suppliers. “If you go on the website now, nearly every single one of the market-leading brands are on -35% discount,” commented one source. “They would be losing money from alcohol without any question.”

Contrasting sites, common ownership

GetIt by ChangiRecommends is part of Changi Travel Services, a 100% subsidiary of Changi Airport Group (CAG) established in 2012.

Until this year the company was focused on providing curated travel solutions to corporate clients and mass consumers’ needs beyond Singapore Changi Airport.

It has traditionally provided a range of traveller-related services such as wifi router rental, SIM card sales, hotel reservations, and tickets for local attractions.

But driven by severe travel restrictions caused by the COVID-19 pandemic, the website has diversified since mid-April into a wide-ranging shopping platform for Singaporean citizens and residents.

Products sold include groceries, beer, wines & spirits, personal care, makeup and skincare, fragrances, electronics watches, gadgets, bags, wellbeing and PPE items.

As reported, IShopChangi has also been selling to non-travellers since April with free delivery in return for a S$99 tax-absorbed spend.

In July, it expanded that offer to include over 100 brands of wines & spirits, sold duty paid to non-flying customers. Those wines & spirits are fulfilled either by official Changi Airport liquor retailer Lotte Duty Free or a number of local Singaporean retailers such as Bottles & Bottles and 1855 The Bottle Shop.

The online offer also includes a wide-ranging beauty products line-up, some fulfilled by Shilla Travel Retail (the Changi Airport beauty concessionaire) and some by local retailer Beauty Language.

CAG disputed any suggestion of unfair pricing. The spokesperson said: “Regarding pricing, we do not have a strategy to price dump, but sometimes our prices may be below the recommended retail price if this is what the rest of the market is offering. We have to be price competitive, otherwise our business cannot succeed.

“We value deeply the relationships we have built with our brand partners over the years and are committed to working with them to serve our mutual customers well, and to secure recovery for the travel retail sector from the current crisis. We invite brands to continue to give us their feedback on how to shape the future of travel retail.”

Retailer concern

While neither of Changi Airport’s anchor store retailers Lotte Duty Free (liquor & tobacco) or Shilla Travel Retail (perfumes & cosmetics) would comment on the record, it is reliably understood that both parties are unhappy about Getit by ChangiRecommends.

Shilla this week advised brands that it is not the supplier of the beauty products stock listed on GetIt by ChangiRecommends. “We do not know who their sources are but we definitely consider this… platform a direct conflict with our travel retail business on iShopChangi,” the retailer noted in an email to brand partners provided to The Moodie Davitt Report by a leading European beauty house. It asked brands to resist any approach to be listed on Get It by ChangiRecommends.

A senior source in the Korean travel retail market said: “It looks like CAG is trying to find ways to generate revenue during this difficult time. However, it should stop the business for the sake of the tenants at iShopChangi, the brand partners, and the local retail market.

“CAG’s new business [GetIt by ChangiRecommends] is targeting Singapore’s local retail market. The problem is that iShopChangi also houses much of the same stock selling to domestic customers. All the tenants at iShopChangi are doing their best to market the platform and lure more domestic customers. CAG’s new business obviously hinders consumer motivation.

“Moreover, CAG’s new business will have a detrimental impact on the domestic retail market. Singapore’s local retail market has become much competitive in recent months and this will surely accelerate the price competition. Brands and suppliers will suffer more. The COVID-19 crisis does not seem to be going anywhere anytime soon. During this difficult time, it is essential to hold tight and go through the hardships together.”

Whack-a-mole

The issue of parallel-fed discounting websites (which are flourishing) is much wider than the GetIt by Changirecommends issue, brand houses say. The avalanche of cheap grey market stock prompted by the pandemic is playing havoc with traditional market pricing structures, one supplier told The Moodie Davitt Report. He said that GetIt by ChangiRecommends is simply indicative of a much bigger challenge.

“Today the only market that continues more or less functioning from a demand perspective is China. So if you go to any of the Taobaos or JD.coms of this world, you can buy products much cheaper than the net billing price at which company affiliates sell to their [Chinese domestic market] retailers.”

With the Chinese consumer so critical to the travel retail channel globally, the flood of cheap product into the Mainland is devastating traditional relativities. “So, when a quasi-governmental institution like CAG participates in this way, potentially hurting not just duty free but also downtown stores that are also tax-paying businesses, it is worrying. But the bigger picture of what’s happening is what happens to the capacity of prestige beauty, luxury brands and probably also liquor brands, when their China local market business collapses and they cannot invest there and build brands.

“Travel retail in the whole of APAC has become a bit of a game of whack-a-mole,” he continued. “If you stop something on one side, it appears on the other side. People are desperate to generate cash. So I would not be surprised that some of these products are from one of the [duty free] retailers. It has to be when it comes to the travel retail-specific products.”

A rival company added: “The industry is suffering a lot and its reputation is at stake for a lot of reasons. There is a lot of wholesale in the market with discounting all over the world. And now if we see airports doing this kind of thing, it goes even further in creating a bad reputation for the travel retail channel as a marketplace, in terms of customers saying, ‘Why should I buy in airports when I can buy online like this and get a better price than domestic?’”

A liquor company executive added: “Everyone is trying to get a piece of the pie during the crisis. But at the end of the day, no-one’s thinking through that you’re going to kill the goose if you’re not careful.”

Getit by Changi Recommends also offers a diverse range of beauty products, including some products supposed to be travel retail exclusives

“Two distinct platforms” – the Changi Airport Group statement in full

“Covid-19 has decimated aviation and travel retail. Airports and brand owners recognise the urgent need to actively explore new revenue sources and to pivot from traditional markets to serve new customers, including domestic non-travellers. This is why, where possible, Changi Airport Group (CAG) has been actively working with travel retail brands to bring them onboard our iShopChangi platform.

“CAG has always viewed locals in Singapore as our closest customers. And we are keen to serve them through our e-commerce channels even when they are not travelling. We are however mindful that we are but one of many players in the domestic e-commerce space.

“Underlying our e-commerce strategy are two key objectives – to work with our travel retail partners so that we grow our businesses on a sustainable basis, and to offer our customers a wide range of products from reliable sources at competitive prices.

“iShopChangi and GetIt by Changi Recommends are two distinct platforms to meet the needs of different customer segments. The brands that we have talked to agree that the e-commerce market is increasingly dynamic and they themselves are rethinking the traditional differentiation between travel and non-travel retail.

“CAG and its subsidiaries do not deal in fake goods. We take the greatest care in how we source for our products and will deal only with legitimate distributors, whether through their travel retail or domestic arms.

“For those unable to supply us with products that our customers want, we will speak to reputable and established parallel importers. Sourcing from these suppliers is common and legal in Singapore. For some high-demand product categories, they offer highly competitive prices benchmarked against other e-commerce platforms as a way to also adapt to the new business environment and customer needs.

“We take pride in the quality of products offered on our e-commerce channels. Both iShopChangi and GetIt offer a no-questions-asked exchange policy if, for any reason, the customer is not satisfied with the product purchased.

“Regarding pricing, we do not have a strategy to price dump, but sometimes our prices may be below the recommended retail price if this is what the rest of the market is offering. We have to be price competitive, otherwise our business cannot succeed.

“We value deeply the relationships we have built with our brand partners over the years and are committed to working with them to serve our mutual customers well, and to secure recovery for the travel retail sector from the current crisis. We invite brands to continue to give us their feedback on how to shape the future of travel retail.”

HAVE YOUR SAY: We invite comment, anonymous if preferred, via the DISQUS platform below or via our LinkedIn page.

Food & Beverage The Magazine eZine